Download MKT 301 - John Stockmyer

Chapter
5
Global Markets and
Marketing
The significance of international marketing to firms.
What makes foreign markets attractive.
Challenges in designing marketing strategies.
Developing Global Brands
The Significance of International Trade
• Access to products otherwise unavailable
– Foodstuffs
– Minerals and other natural resources
• What don’t we have in U.S.?
• Comparative Advantage
– Advantage in natural resources
– Advantage in human resources
Exports as a Percent of GDP in
Selected Countries (2006)
Country
Exports as a % of GPD
United States
11%
United Kingdom
28
France
27
Germany
45
Japan
16
Canada
36
Mexico
28
China
39
Source: http://datafinder.worldbank.org/exports-goods-services-gdp Year: 2006
Environmental Considerations in
International Marketing
• Social and Cultural Forces
• Economic Environment
– Infrastructure
– Level of economic development
• Political and Legal Forces
• Trade Barriers
– Tariff: A tax imposed on a product entering a country.
– Import quota
– Local-content laws
– Boycott or embargo
• Free-Traders vs. Protectionists
Trade agreements both inhibit and encourage
international marketing
• General Agreement on Tariffs and Trade (GATT) - now
called the World Trade Organization (WTO)
• The European Union (EU)
• North American Free Trade Agreement (NAFTA)
• The Asia-Pacific Economic Cooperation forum (APEC) is a
trade pact with 19 member nations that account for 45
percent of world trade.
EU Members (and candidates)
2009
NAFTA
Canada 30.7
United States 283.0
Mexico 95.8
Colombia 37.7
Ecuador 12.2
Venezuela 23.2
Brazil 161.8
Peru 24.8
Argentina 36.1
Chile 14.8
Bolivia 8.0
Uruguay 3.2
Paraguay 5.2
Japan 126.4
India 984
Bhutan 0.6
APEC
South Korea 46.5
China 1,243
Nepal 22.0
Taiwan 21.8
Hong Kong 6.7
Pakistan 141.9
Bangladesh 127.6
Vietnam 76.2
Philippines 73.1
Brunei 0.3
Thailand 61.2
Singapore 3.2
Maldives 0.3
Sri Lanka 18.7
Malaysia 22.1
Papua New
Guinea 4.6
Australia 18.7
Indonesia 199.7
New Zealand 3.8
Designing the International Marketing Mix
• Marketing Research
– Statistical data are scarce and often not reliable.
– There is a lack of uniformity among countries regarding
the definition of measures.
• Product Planning decisions include:
– Product adaptation.
– Branding and labeling.
• Pricing issues are:
– Cost-plus pricing. Price Differential.
– Dumping. Foreign Exchange.
– Countertrade or barter.
Designing the International Marketing
Mix (Con’t.)
• Distribution systems consist of:
–
–
–
–
Domestic foreign-trade middlemen.
Foreign-trade middlemen located abroad.
Wholesalers and retailers operating within foreign markets.
Manufacturer’s sales branches and offices located in foreign
countries.
– Bribes, kickbacks, and extortion payments are common in many
international distribution systems.
– Gray marketing (export diversion)
• Advertising focuses on:
Pringles Ad
– Standardization.
– Adapting media strategy and message details.
Strategic Planning for
International Marketing
• Global Strategy - the same marketing plan is
employed throughout the world.
• Regional Strategy - used when geographic
areas have much in common, but are distinct
from other geographic areas.
• Local Strategy - used when there are few
marketing mix dimensions that can be
transferred from one market to another
Global Branding Strategy
• What is is?
• Why such a desire to do it?
• Few brands/products REALLY do it
completely.
• #1 Global brand of Shampoo?
Brand Name Problems...
• You’ve probably heard some of the classic
blunders made by American companies:
• Chevy Nova in Mexico
• Clairol Mist Stick in Germany
• Look at some interesting foreign brands...
Poor Candidates for Global Brands
• Crapsy Fruit:
• Pocari Sweat:
•
• Japanese Sport Drink
French cereal
• Happy End:
• Skinless:
•
• Japanese condoms
German toilet paper
• Bimbo:
• Zit:
•
• German lemonade
Mexican Toasted Bread
• Plopp:
• Super Piss:
•
• Scandinavian car lock de-icer
Scandinavian chocolate
Source: Newsweek March 17, 1997
International
Trade Balance
Info.
The Role of International Trade Balances
• A country’s balance of payments is an accounting record
of all its transactions with all the other nations in the
world.
• A country’s trade balance is the difference between what
it exports and what it imports.
– When exports exceed imports, trade
–
surplus
When imports exceed exports, trade deficit
A country’s expenditures across all categories
must equal income across all categories
• If total expenditures are more than total income,
the country must borrow to make up the
difference.
• If a country’s debt grows, it is faced with
pressure to raise taxes and lower government
spending.
The U.S. has large expenditures in four
categories that significantly affect its
balance of payments.
•
•
•
•
Military forces stationed overseas
Foreign aid
Oil imports
American tourist travel abroad
To offset these expenditures and maintain equilibrium in
the balance of payments, U.S. businesses need to
generate a substantial trade balance.